NPO Taxation - Anonymous Donations
“The Finance Act, 2006 had brought radical changes with regard to treatment of anonymous donations received by charitable organisations by inserting a new section 115BBC, with tax rate @ 30% without any deduction or set off under any other head. Further, the Finance Act, 2009 provided some relief by exempting anonymous donations to the extent of 5% of total donations received or Rs.1 lakh, whichever is higher.
However, religious organisations have been kept outside the purview of this provision. In other words, any anonymous donation received by a trust or an institution created wholly for religious purposes shall not be covered by these provisions. In this issue, we discuss the concept of anonymous donations, the legal provisions, its taxability, exclusions, the CBDT circulars & clarifications, etc.
For more, please read the Ecommunique in the attachment.